Koster v. Turchi

• Citation: 79 F. Supp. 268
• Decision Date: 08 April 1948
• Docket Number: Civ. A. No. 7755.
• Parties: KOSTER et al. v. TURCHI et al.
• Court: U.S. District Court — Western District of Pennsylvania

79 F. Supp. 268

KOSTER et al. v. TURCHI et al.

Civ. A. No. 7755.

District Court, E. D. Pennsylvania.

April 8, 1948.

Thomas I. Guerin, of Philadelphia, Pa., for plaintiffs.

E. D. Dupree, Jr., Asst. Gen. Counsel, Hugo V. Prucha, Chief Rent Litigation Unit and Francis X. Riley, Litigation Atty. Office of Housing Expediter, all of Washington, D. C., and Cyril F. Pessolano, Chief, Litigation Unit and Conrad G. Moffett, Enforcement Atty., both of Philadelphia, Pa., for Joseph T. Turchi.

Joseph P. Gaffney, of Philadelphia, Pa., for City of Philadelphia.

GANEY, Judge.

This is a motion pursuant to Rule 12 of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, to dismiss the complaint concerning an action in which the plaintiffs seek (1) equitable relief from special orders issued by the Philadelphia Area Rent Director increasing the maximum monthly rents of dwelling houses occupied by them, and (2) to restrain their landlord from demanding such increased maximum rents and to require it to refund to them the excess of the increased rents over the former rents already collected by it.

The action is brought by the plaintiffs for themselves as individuals and as a committee on behalf of the Girard Estate Tenants Association, of which they are members. The Association is composed of approximately three hundred persons who are tenants of dwelling houses located in a section of Philadelphia known as Girard Estate, the landlord of which is the City of Philadelphia, Trustee under the Will of Stephen Girard. In May of 1942, the Price Administrator entered a general order freezing the rents which the tenants of Girard Estate were then paying under their respective yearly leases as the maximum legal rents which could be demanded from them by their landlord. Five years later, on June 6, 1947, after petition for adjustments in rent had been filed by the City of Philadelphia, the Area Rent Director issued approximately four hundred eighty one (481) individual orders increasing the maximum rents of an approximately similar number of dwelling houses in Girard Estate. The increases, which in some instances amounted to thirty-three per cent and were in amounts greater than those requested in the landlord's petition or petitions, for the individual dwellings were not uniform for the same type of housing accommodations, and, in many cases, the maximum rent fixed for one dwelling was greater than the maximum fixed for another with better and more valuable housing accommodations. Moreover the orders fixed the same maximum rents for every month, despite the fact that the then current leases provided for lower rents during the four summer months when household heating was not supplied by the landlord. Issuance of the orders were made without notice to the tenants of the prior filing of the petition or for increases by the City of Philadelphia, or that action upon them was contemplated by the Area Rent Director which would affect their interest adversely. Four days later the plaintiffs and other members of the Association requested the Rent Director to vacate the orders increasing the maximum rents and sought permission to inspect petition or petitions for increases and supporting evidence submitted therewith by the City. In addition they asked to be supplied with information from which they might determine whether or not the maximum rents fixed by him for their dwellings were the same or similar to the maximums fixed for other dwellings of comparable locations, sizes and accommodations. In the alternative, the tenants requested the Rent Director to suspend the orders until a full hearing could be had to permit them to present evidence in their own behalf against such increases. These requests were refused. On or about June 26, 1947, the City gave notice to the tenants of Girard Estate that their leases would be terminated on July 31, 1947, and that they would be required to sign new ones at the maximum legal rents, beginning August 1, 1947. In compliance with these notices, the members of the Association reluctantly executed the new leases at the increased maximum rents.¹ In the meantime before the usual time within which protests might have been filed by the tenants under the Price Administrator's regulations² then in effect, the Emergency Price Control Act of 1942, as amended, 50 U.S.C.A.Appendix, § 901 et seq., on June 30, 1947, expired.

The asserted legal basis for the complaint is that the Area Rent Director's orders have deprived the members of the Association of their property without due process of law in violation of the Constitution and that the orders were not issued in accordance with law and were arbitrary and capricious. On the other hand, the defendants, in addition to claiming that the plaintiffs have no legal standing to maintain this action and that the complaint fails to state a claim upon which relief can be granted, contend that this court lacks jurisdiction over the subject matter of this action.

Section 203(a) of the Emergency Price Control Act set forth that any person "subject to" a regulation or order issued by the Price Administrator could file a protest in accordance with the regulations prescribed by the Administrator. Upon the denial of his protest by the Administrator, a person "aggrieved" could file within thirty days after the denial, a complaint in the Emergency Court of Appeals. Id. Sec. 204(a). Equitable relief against the regulations or orders of the Administrator could be obtained only in the Emergency Court of Appeals with the right of review by certiorari in the Supreme Court of the United States, for the authority to determine the validity of an order or regulation was reposed exclusively in these courts. Bowles v. Willingham, 321 U.S. 503, 64 S.Ct. 641, 88 L.Ed. 892; Lockerty v. Phillips, 319 U.S. 182, 63 S.Ct. 1019; 87 L.Ed. 1339.

Even if we assume that under Parker v. Fleming, 329 U.S. 531, 67 S.Ct. 463, 91 L.Ed. 479, the plaintiffs in the case before us were "subject to" the orders of the Administrator within the meaning of Sec. 203(a) of the Emergency Control Act and that they had a right to file protests against such orders³, the Emergency Court of Appeals, by its own rulings, is without jurisdiction to grant the relief sought here. That Court held in Talbot v. Woods, Em. App., 164 F.2d 493, that its residual jurisdiction preserved by section 1(b) of the Act did not give it authority to determine the retroactive or prospective validity of a regulation or order of the Price Administrator unless a civil or criminal enforcement proceeding had been brought based upon a past violation alleged to have been committed while the Act and regulations thereunder were still in effect. To the same effect is Standard Kosher Poultry, Inc., v. Clark, Em.App., 163 F.2d 430. The case before us is obviously neither a civil or a criminal enforcement proceeding predicated upon an alleged violation of the Emergency Price Control Act. The segment of jurisdiction taken away from the Emergency Court of Appeals did not revert, nor has it been transferred, to the federal district courts. Creedon v. Stratton, D.C. Neb., 74 F.Supp. 170, 180.

After June 30, 1947, the date on which the Emergency Price Control Act expired, rent controls are imposed solely by force of the Housing and Rent Act⁴ of 1947. This Act is constitutional. Woods v. Cloyd W. Miller Co., 333 U.S. 138, 68 S. Ct. 421. Section 203(a) of the Act provides: "After the effective date of this title, no maximum rents shall be established or maintained under the authority of the Emergency Price Control Act of 1942, as amended, with respect to any housing accommodations." Section 204(b) adopted the maximum rents established under the expired Act. These rents are subject, however, to a power in the Housing Expediter, by regulation or order to make adjustments concerning them, as may be necessary to correct inequities, or to remove them entirely.⁵

Pursuant to the authority vested in him by Sec. 204(d) of the Act, the Housing Expediter issued controlled Housing Rent Regulation⁶ and Rent Procedural Regulation 1.⁷ Section 840.59 of the latter regulation provides in part as follows: "Where no request for administrative review was filed prior to July 1, 1947, the provisions of this part regulation shall be applicable to any such review." This section puts the plaintiffs in no better position than any other tenant under the Act. When a tenant is of the opinion that his rent is too high and his landlord is of a contrary view, the tenant's only remedy, without vacating the premises or defending eviction proceedings, is to file an application for decrease in maximum rent in accordance with Sec. 5 of Rent Procedural Regulation 1. This section states: "Tenants application, for decrease in maximum rent regulations shall be filed with the rent director for the defense rental area within which the housing accommodations involved are located. The application for decrease in maximum rent shall be filed on forms prescribed by the Housing Expediter. Action thereon shall be within the discretion of the rent director * * *"⁸. (Emphasis supplied). No provision is made for review or for an appeal to the Housing Expediter of the rent director's exercise of discretion under this section of the regulation, and none is intended.⁹ Nor is direct judicial review of action taken by the Housing Expediter and his subordinates provided for in the Act. Section 2(a) of the Federal Administrative Procedure Act, as amended, 5 U.S.C.A. § 1001(a), has been reamended¹⁰ so as to exclude from its operation the functions conferred by the Housing and Rent Act of 1947. Unless direct judicial review is permitted by statute, either expressly or by implication¹¹, none exists. Stark et al. v. Wickard, 321 U.S. 288, 306, 64 S.Ct. 559, 88 L.Ed. 733. A review of the history of the Act will not help the tenants' cause. Consequently, whatever relief this court could grant the members...